You are evaluating the performance of the laboratory department manager. The output of this department is the number of tests performed. A static budget was prepared at the beginning of the year. You are now examining that budget in relation to actual experience. The relevant data are included in the attachment. The department manager is pleased because the department has a favorable $50,000 cost variance.
Evaluate the effectiveness of the manager using the flexible budgetary variance model. Did the manager do a good job this year?
A flexible budget is a budget that adjusts for changes in cost driver activities. In this case the flexible budget is expressed as a fixed cost plus a ...
Solution Summary
This solution looks at a flexible budgetary variance model.
... company can not attain the budgeted goals. ... The training for the budgeting is also important ... advantages and disadvantages of the flexible budget and identifies ...
... Computation of Static Budget Variance- Flexible Budget Variance and ... Variance.Comments and analysis of Budget variances ... For July 2008 it budgeted to manufacture ...
... Build the flexible budget based on the budgeted cost information from steps 1 and 2, and the actual volume of output from step 3. Flexible budgets are prepared ...
... Therefore, budgets is also regarded as a significant tools ...Flexible Budget Variance ... Income Budgeted Flexible Actual Flexible Statement amount per Budget Results ...
...Flexible budget helps in budgeting at different volumes and ... the actual costs with the budgeted amount for ... these cost close to the flexible budget prepared in ...
... that comparison between actual and budgeted levels is ... The article explains how flexible budget enables the firm to ... a one sided view on fixed-flexible budgets. ...
... Capital Budgeting and Flexible Budgets. ... We will go straight to the flexible budget this time ... Actual Revenue = 25,000 x $85 = 2,125,000 Budgeted Revenue = 25,000 ...
